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What is TDS on Crypto (1% TDS)?
1% TDS is deducted at source on all crypto transactions above ₹10,000 in India. It's not an additional tax — it's an advance tax deducted by the exchange that can be claimed while filing ITR.
Full Explanation
Under Section 194S of the Income Tax Act (effective July 2022), a 1% Tax Deducted at Source (TDS) applies to all cryptocurrency/VDA transfers above ₹10,000 (₹50,000 for specified persons like individuals/HUFs with income under ₹50 lakh). The buyer or exchange deducts this before completing the transaction. TDS is not an additional tax — it's an advance against your final tax liability. You can claim credit for TDS when filing your ITR. If your total tax liability is less than TDS deducted, you get a refund.
Example
You sell ₹1,00,000 worth of ETH on CoinDCX. TDS = ₹1,000 (1%) deducted automatically. You receive ₹99,000. The ₹1,000 reflects in your Form 26AS and can be claimed in ITR.
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Last updated: 2026-03-21
